Hot on the heels of our Zillow story last week comes news that its main rival, Opendoor, is launching an Initial Public Offering (IPO) that values the company at around $4.8bn.

Opendoor is a U.S. online real estate company, founded in 2014, which buys homes directly from homeowners and sells those homes on its own marketplace. It was the first of its kind and competes not only with Zillow but also with Redfin and Offerpad. To date it has raised around $1.35 billion in venture capital and is being touted in some circles as ‘the next $50+billion company’.

Its model is undoubtedly being watched carefully by players in the U.K. portal market.

Founder and CEO Eric Wu said: “We founded Opendoor to make it simple and instant to buy and sell a home, to delight customers and make their lives less stressful, and to build an iconic, once-in-a-generation company. This is one of many milestones toward our mission and will help us accelerate the path toward building the digital one-stop shop to move.”

In 2017, Opendoor sold 3,127 homes. It brought in revenue of $700 million. But the company’s adjusted EBITDA reported a loss of $57 million or 8% of revenue.

In 2018, Opendoor sold a total of 7,470 homes. Revenue grew by 159%, to $1.8 billion. However, Opendoor’s adjusted EBITDA still reported a net loss of $131 million, or 7.1% of revenue.

For 2019 there was $4.7 billion in revenue from the sale of almost 19,000 homes. But Opendoor’s adjusted EBITDA was still a net loss of $218 million.; 4.6% of revenue.

The effect on revenues as a result of the Covid pandemic in 2020 is still to be seen but during shutdown the company laid off 35% of its workforce.

There’s an interesting video by respected commentator, Mike del Prete, highlighting that when looking at a company’s forecasts for growth it is wise not to take statistics at face value, and that disruptor companies often face an early plateauing in growth.

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